June 14, 2019

The Weekly Gist: The Father’s Day Cage Match Edition

by Chas Roades and Lisa Bielamowicz MD

Congratulations to the Toronto Raptors and the St. Louis Blues, and their loyal fans, for winning the 2019 NBA Championship and NHL Stanley Cup, respectively. But now what are dads supposed to watch this Father’s Day weekend? We think the Democratic party missed a big opportunity to cash in on the newly-legalized sports gambling market. Why not turn the process of choosing which of the 23 candidates for President make the cut for this month’s televised debate into a weekend-long decathlon? Imagine events in hand-shaking, baby-kissing, table-standing, and selfie-taking. Maybe even a special single-payer cage match!

We’d watch it.


THIS WEEK IN HEALTHCARE

What happened in healthcare this week—and what we think about it.

A major change in employer-sponsored insurance

This week, the Trump administration released the final version of a new rule that could fundamentally change how many employers—particularly small businesses—pay for healthcare coverage for their employees. Starting in January of next year, workers will be able to use tax-advantaged employer funds deposited in health reimbursement arrangements (HRAs) to purchase insurance coverage on the health insurance exchanges created by the Affordable Care Act (ACA). The administration believes that 800,000 more Americans will become insured as a result of the rule switch, which also loosens restrictions on the types of coverage that can be purchased, opening the door for HRAs to be used to buy non-ACA-compliant insurance. Critics of the rule, which was first proposed in October of last year, worry that employers will use the new approach to “dump” older, sicker employees onto the ACA marketplace, while supporters point to the possibility that small businesses that were previously unable to provide health insurance might now begin to offer coverage to their employees. Employers, insurers, and marketplace administrators will face a tight timeline to prepare for the implementation of the new rule before this fall’s open enrollment season. The new rule is yet another step by the Trump administration to retool the ACA to incorporate conservative health policy principles, encouraging greater consumer decision-making and injecting market competition into the insurance marketplace.

AMA votes to maintain opposition to single-payer healthcare

In a close vote at this week’s annual meeting, the American Medical Association (AMA) voted to maintain the organization’s opposition to single-payer healthcare. Just 53 percent of delegates voted against a resolution submitted by the AMA’s Medical Student Section that would have reversed the organization’s longstanding opposition to single-payer policies and replaced it with a formal position of neutrality. The narrow margin is reflective of the changing demographics of the AMA, with growing representation of women and younger doctors. Given that the AMA’s membership, and the composition of its House of Delegates in particular, is tilted toward older doctors and those from smaller independent practices, support for single payer may be even higher in the broader physician community. In a separate resolution, a large majority of AMA delegates voted to support provisions strengthening the ACA. Stepping back, the close vote, which would have been unimaginable a decade ago, signals the growing momentum behind single payer, or at minimum, openness among doctors to thoroughly study the impact before passing judgment—and runs counter to the historical positions of the AMA and other large provider advocacy groups. (Had it passed, the AMA would have been the largest provider organization to remove opposition to single payer, a huge win for “Medicare for All” advocates.) Debate across the week highlighted a growing generational divide between tenured and younger physicians on issues like public healthcare funding, access to care and physician autonomy, which will surely grow as younger, more progressive doctors enter the field.

Refusing to participate in “manels”

In a statement this week, National Institutes of Health (NIH) Director Francis Collins announced that he would decline to participate in “manels”, or all-male speaking panels: “Starting now, when I consider speaking invitations, I will expect a level playing field, where scientists of all backgrounds are evaluated fairly for speaking opportunities. If that attention to inclusiveness is not evident in the agenda, I will decline to take part.” The manel is pervasive in healthcare, with 70 percent of hospital and healthcare industry speaking slots filled by men. Women also hold just 29 percent of tenured faculty positions, showing not only the clear need for more exposure for female medical and scientific experts, but also the potential challenges of attaining diversity in every speaking forum. The commitment of a respected luminary like Collins makes an important statement and will surely influence planners of the conferences where he keynotes—and attracts thousands of attendees. But measurable improvements in diversity will require younger leaders, for whom exposure is critical for professional advancement, to also take the pledge—and for those who use the hashtag #nomoremanels to follow through on that commitment.


GRAPHIC OF THE WEEK

A key insight or teaching point from our work with clients, illustrated in infographic form.

Stealing a page from the Amazon playbook

Healthcare leaders eye Amazon with both envy and fear—envy over the incredible consumer loyalty the online giant garners, and fear of the kind of disruption Amazon could create for incumbents. If five years ago everyone was in search of “Uber for Healthcare,” there’s no doubt that today’s obsession is how to become “Amazon Prime for Healthcare.” One key ingredient of Amazon’s success, however, will require a significant shift in thinking for traditional healthcare providers. The trend in healthcare is toward aggregation of delivery assets into single companies, who look to “own” larger parts of the value chain. Amazon’s approach is different—it looks to aggregate products and service through curation and partnership, rather than ownership. That’s how it’s able to be the “everything store” for consumers, serving as a curated marketplace of independent vendors, and focusing on vetting and enabling those vendors against a high standard of service, quality and price. More than two-thirds of the products purchased on Amazon are sold by someone else—Amazon is the gatekeeper. That’s a lesson well worth learning for health systems: we can’t own everything, so we’d often be better off serving as the gateway between high-value care delivery partners and our patients.


THIS WEEK AT GIST—ON THE ROAD

What we learned this week from our work in the real world.

Are we being slowed down by our own success?

Lisa:
Over the past year I’ve had many discussions with health system and physician leaders looking to jump-start a clinically-integrated (CI) physician network that is underperforming or has lost momentum and needs new direction. But recently I’ve had conversations with two leaders who expressed a different concern, worrying that their CI networks are now being held back because they have performed too well. To be clear, neither was suggesting that they wished their physicians had achieved smaller Medicare shared-savings bonuses or scored worse on quality metrics; rather, they were raising the more existential question of how success in today’s model makes it harder to create motivation to change. “Our doctors put in a lot of work, and it’s paid off with our ACO getting a bonus every year,” shared one physician leader. “I thought that early success would set us up to move faster, and face anything that came at us. But now I worry we’ve celebrated that success so much that it’s created the feeling that we’re doing everything right, and don’t need to change.” Most CI networks and accountable care organizations (ACOs) have organized around population health goals, building basic care management and quality improvement infrastructure to perform against a handful of shared savings contracts, with little downside risk. Even the most successful will need a much deeper level of integration, greater resources and more physician commitment to work toward the goals of seamless access, network management, and cost reduction increasingly demanded by employers and consumers. The hardest task for physician leaders may be managing against a constant and unrelenting need for change—and ensuring that success is recognized but does not create complacency.

Asking the right benchmarking question

Chas:
I’ve had a couple of conversations this week with health system executives about benchmarking. For good reason, the healthcare field is inundated with benchmarks, and the proliferation of metrics to allow hospitals and doctors to compare their performance against peer groups has only accelerated with the shift to electronic health records. Much of this benchmarking is laudable—it’s important to use hard data to compare clinical and operational performance against others, to get an understanding of where there are opportunities to improve. And we must look outside our own four walls for comparison data—comparing performance of doctors or clinical processes inside one entity only goes so far, because the entire enterprise might lag behind others. But one area where I’m increasingly skeptical of benchmarking is consumer strategy, particularly among hospitals and health systems. “How are other hospitals approaching scheduling?” is a good example of asking the wrong benchmarking question. A better version: “How is what OpenTable does for restaurant reservations applicable to our organization?” And an even better one: “How do we want to be handling scheduling ideally, and how far are we from achieving that goal?” In other words, the best benchmark to pay attention to is the health system’s ideal future state, not the (often underwhelming) performance of even the best “peer” organizations.


ON THE GIST TURNTABLE

Give this a spin, you might like it.

Can domestic bliss be interesting? That question has plagued creative types for a long time. (Think of Tolstoy: “Happy families are all alike; every unhappy family is unhappy in its own way.”) How to construct worthwhile art out of happiness? Perennially morose singer-songwriter Bill Callahan shows it’s possible on his latest double album Shepherd in a Sheepskin Vest, his first release since marriage and fatherhood. The title is a clue—the subtly menacing image of a caretaker clothed in the skin of his flock—and Callahan’s newfound contentment remains cloaked in reflective melancholy throughout this autobiographical, 20-song collection. It’s some of his best work yet, with Callahan delivering well-crafted observations on being a family man. The songs are as lo-fi and sparse as always, delivered in his captivating baritone over acoustic guitar. He (or his narrator) wrestles with the immense responsibility of being a father (“The house is full of whatever I bring to the table/If there is no supper, the children look to me”), weighing it against his own experience of parental abandonment (“Well, I guess I can describe it best/As the year the lion left the family crest/And we made a crown of the space that was left”). He resolves the tension not by becoming a lion for his own son, but rather—in the startlingly beautiful track “Tugboats and Tumbleweeds”—a “tugboat” guiding him through “a rogue tide”. It’s a lovely metaphor from a singer whose vision and accumulated wisdom bring a fresh perspective to the clichés of domesticity—just in time for Father’s Day. Best tracks: “Watch Me Get Married”; “Black Dog on the Beach”; “Lonesome Valley”.


GIST IN THE NEWS

We said it, they quoted it.

The biggest health system in New York used to make 80% of its revenue from hospitals. A decade later, that’s down to half.”
Business Insider; June 11, 2019.

“Nationally, more and more of healthcare is being provided outside of hospitals. According to an American Hospital Association report cited by Modern Healthcare, hospital systems generated $472 billion in revenue from outpatient care in 2017 and $498 billion from inpatient care.

There are a few main reasons for the shift, according to Dr. Lisa Bielamowicz, the president of Gist Healthcare, which consults with health systems, told Business Insider. For instance, health systems are buying up doctors’ practices and businesses that already were outside of the hospital business. At the same time the way health systems get paid is changing, as well as patients’ preferences for where they want to get care.

‘The majority of big health systems now get 50% or more from the outpatient or ambulatory space,’ Bielamowicz said.”


WHAT WE’RE READING

Stuff we read this week that made us think 

Consolidation is everywhere in healthcare

new report released this week by the anti-monopoly think tank Open Markets Institute (OMI), based on data from market research firm IBISWorld, highlights just how pervasive the problem of consolidation has become across the healthcare industry. Adding to the data already available on other segments of the economy, from airlines to cellphone providers, the OMI report shows how concentrated healthcare has become. Interestingly, the report doesn’t focus on the usual suspects—hospitals and insurers—but instead takes a broader view of the market. For example, the two largest ambulance manufacturers account for 83 percent of the market. Two firms make up 59 percent of surgical apparel manufacturing. Three firms combine for 86 percent of the IV solution industry. And on and on. It’s worth digging into the data, which OMI presents in a clever visualization tool. Industry consolidation is quickly becoming a policy flashpoint in healthcare, with the antitrust subcommittee of the Senate Judiciary Committee holding hearings on the topic this week. As former House speaker Newt Gingrich points out in a new op-ed in The Hill, some of the consolidation is a by-product of the shift away from traditional fee-for-service models and may benefit consumers in the long run. But we seem to be approaching a new era of trust-busting in America, with Presidential candidates and Federal judges taking a more jaundiced view of consolidation—and healthcare is no exception. Along with the renewed focus on the pocketbook impact of high care costs (from drug costs to “surprise billing”), the rise of anti-monopoly rhetoric may result in new constraints on the “bigger is better” mentality that’s become commonplace across healthcare. Monopolists beware.

Rethinking complex surgery for the elderly

More very old patients, in their 80s and beyond, are undergoing extensive surgeries for conditions like pancreatic cancer and aortic aneurysms. Unsurprisingly, with almost no surgery deemed too dangerous, the mortality and recovery outcomes of these patients are often much worse than those for patients a decade or two younger. A recent New York Times article describes how leaders of the American College of Surgeon’s (ACS) Coalition for Quality in Geriatric Surgery are working to create new standards to evaluate older patients for intensive surgery, and assist surgeons in advising patients and families about the associated risks. The core of the effort is ACS’s geriatric surgery verification program, which will set 30 standards for hospitals designed to meet the needs of older patients, ranging from facility modifications to improved risk assessment and adapted pain management. The program was designed to align with established quality programs in pediatric, trauma and cancer surgery. According to a lead physician, only recently have surgeons recognized the unique needs of geriatric surgery: “People understand that children are different from adults…It’s taken a surprisingly long time to come around to the realization that older adults are also different.” This work is emblematic of a larger movement to consider the final third of a person’s lifespan, beginning in the late 50s, as a separate stage of life. This phase of “elderhood” should be worthy of the same study and attention as childhood and adulthood. Researchers are both promoting a new view of aging and activity and urging a need to rethink standard medical guidance for older patients, challenging whether research, largely conducted on younger adults, and the resulting clinical guidelines, can be directly applied to the elderly. This work is worth watching as it could be foundational to reshaping healthcare in a way that both lowers costs and centers outcomes around the goals of demanding Baby Boomers—who are just beginning to enter their elderhood years.

The future of healthcare according to a “radical capitalist”

We’re not aficionados of the business memoir genre, but we might have to pick up a copy of Mark Bertolini’s book after reading a fascinating excerpt in Chief Executive this week. The former Aetna CEO’s book is entitled Mission-Driven Leadership: My Journey as a Radical Capitalist, and in it he shares his vision for the future of healthcare and his rationale for selling the insurance company to pharmacy giant CVS. Frustrated with a healthcare system built around payer and provider priorities, Bertolini asks us to imagine a system oriented around the needs of the individual. “Based on your current health and your long-term goals, let’s design a set of benefits and a way to pay for them that would take care of you for life,” he envisions the health plan executive of the future saying to a customer. The discussions leading up to the sale of Aetna to CVS were framed around just that vision—one that the company now seems to be rapidly implementing in the rollout of its new HealthHUB stores. Bertolini hopes for radical changes in how care is delivered in those new, more consumer-oriented settings. For example: “The new stores will expand [beyond MinuteClinic services] and also offer procedures or exams that have long been done in hospitals…[W]hen a woman receives a mammogram, her doctor sometimes orders a CT scan. But the patient may have to wait two weeks, as the CT scan operators are only available from eight to five. The CVS stores could have a 24-hour CT scan available.” To achieve his vision, Bertolini was willing to trade off the independence of Aetna as a company, and his own position as CEO, paving the way for what may prove to be one of the most significant realignments in the healthcare industry. Fascinating reading, from a fascinating leader.


Thanks for reading this week’s edition! At the end of another busy week of working with members and our awesome, growing team, it’s such a joy to sit down and share our thoughts on what we’ve learned. Keep sending us your feedback and suggestions, and pass this along to friends and colleagues as well. Maybe even encourage them to subscribe!

Most importantly, please let us know if there’s anything we can do to be of assistance in your work. You’re making healthcare better—we want to help!

Best regards,

Chas Roades
Co-Founder and CEO
chas@gisthealthcare.com

Lisa Bielamowicz, MD
Co-Founder and President
lisa@gisthealthcare.com